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Swiss government wants to end tax penalty for married couples

The Federal Council – Switzerland’s seven-member government – has set out plans to remove the current federal tax penalty on married couples to make things fairer and encourage more people into the workforce.

Published: 23 March 2018 11:10 CET
Swiss government wants to end tax penalty for married couples
Photo: halfpoint/Depositphotos
Currently in Switzerland when two people get married their incomes are combined and taxed jointly, meaning they lose out compared to cohabiting couples who are taxed separately and therefore each have a tax-free allowance.
 
Though it is considered unconstitutional for a married couple to pay more than ten percent of the amount they would have paid as an unmarried cohabiting couple, in practice many married couples do pay considerably more.
 
Under the government’s new plans, announced in a statement on Wednesday, that gap would be reduced slightly as it evens out the rules applying to federal tax (communal and cantonal taxes would not be affected). 
 
The new system would see married couples’ tax calculated in two ways – jointly, as usual, and under the rules that apply to cohabiting couples. The couple then must pay the lesser amount of the two calculations.
 
The plans “aim to end a controversy that has lasted several decades and end the extra charge, contrary to the constitution, which burdens affected married couples,” the government said in its statement. 
 
Changes will also be made to the taxation of unmarried couples with children. Currently, while the parents' incomes are taxed separately, they can benefit from the same child deductions as married couples with children, something which “is one of the causes of the marriage penalty,” feels the government.
 
Under the planned changes, unmarried couples with children will no longer be able to apply this child deduction to their tax rate, so their tax will go up.
 
Single parent families will, however, be compensated for this by a special tax deduction “for social policy reasons”.
 
 
As a result of all these changes, federal coffers will end up 1.15 billon francs a year out of pocket, said the government.
 
However it hopes the initiative will encourage more people into the workforce by removing the dissuasive effect of the current tax rules on two-income couples.
 
Since the secondary salary will be taxed less, it will be more favourable for both members of the couple to go out to work. 
 
Up to 15,000 full time jobs could be filled as a result, feels the government.  
 
The issue of taxation on married couples has been long discussed in Switzerland. 
 
In February 2016 a referendum aiming to put an end to the so-called marriage penalty was narrowly rejected by the public, but mainly because it would have changed the definition of marriage to potentially thwart any chance of same-sex marriage being legalized in the future.
 
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MONEY

Can I get financial help in Switzerland if I’m struggling to pay the bills?

Can foreign residents who are struggling to get by receive the same financial help from the state as the Swiss do, and under what circumstances?

Published: 26 February 2024 13:48 CET
Can I get financial help in Switzerland if I'm struggling to pay the bills?

Say you are a foreign resident in Switzerland and find yourself short of funds, and are unable to pay your monthly bills.

Can you count on your canton’s public coffers to help you out?

Much depends on your status in the country.

If you have a residency permit, have been working in Switzerland and contributing to the social security scheme, then you can receive financial assistance, in form of subsidies, from your local authority.

This is how it works

For instance, if the obligatory health insurance premiums exceed 8 percent of the household income, then you are eligible to receive this help.

However, your canton of residence will look not only at your earnings, but at any other financial assets you hold as well.

So if your income is low but you have plenty of money in the bank in the form of savings or other investments, you will not qualify.

Generally speaking, any resident who is a low earner or has a large number of children — regardless of nationality — could be eligible for subsidised premiums, though criteria, as well as amounts, vary from one canton to another.

READ ALSO : How do I apply for healthcare benefits in Switzerland? 

What about housing?

Low-earners (again, regardless of nationality) are entitled to have their rents subsidised, under certain circumstances — the conditions as well as the income threshold is determined by cantonal authorities.

Generally speaking, in order to claim this help, you must prove that you live in the cheapest available housing in your area. (Needless to say, if you reside in a luxury apartment, you can’t ask for rent subsidy.)

If you don’t fulfill this particular condition, you will be told to move to cheaper accommodations before claiming any benefits.

Exceptions to this rule include situations such as a large number of minor children living in the household, which may make relocation — that is, finding a sizeable apartment at a cheaper price — unrealistic.

The amount of rent reduction will be set by the authorities.

Is any other help available?

If you can’t afford anything in Switzerland which, admittedly, is an extreme and rare situation for anyone working full-time and already receiving either health insurance or housing subsidy (or both), then your only other option is applying for welfare.

This, however, should be the absolute last resort if you want to remain in Switzerland and eventually apply for naturalisation, or even have your work permit renewed.

That’s because being on public assistance is grounds for refusal of citizenship — unless all the money is repaid in full in advance of your application.

READ ALSO: Can I still get Swiss citizenship after claiming social benefits? 

What about disabilities?

This falls under the general social security scheme, so if you are working in Switzerland, then you are eligible to receive these benefits.

The only exception may be people from outside the EU /EFTA — unless your country of origin has concluded a social security agreement with Switzerland.

This link provides additional information about these countries.

If you qualify for disability (and medical records confirm this), you can apply for these benefits at the social security office of your canton.

There are some other things you should keep in mind as well:

Not all foreigners who have a residency permit can apply for financial assistance.

If you came to Switzerland on a temporary permit (L or B), then you don’t have access to any benefits.

And if you ‘bought’ your Swiss residency, you can’t resort to any public help either.

The condition of your stay in Switzerland is that you should be self-sufficient enough to live here without having to work or resort to welfare benefits.

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